India and Pakistan: Aid and Compliance with Comprehensive Test Ban Treaty (Hansard, 24 February 1999)

§ Baroness Amos

The Government's guiding principle in relation to the provision of aid to these countries following the 1998 nuclear tests has been that all new commitments should be carefully re-examined but the poor of India and Pakistan should not be punished for the action of their government. Virtually all our bilateral assistance to India and Pakistan is poverty focused and we have therefore decided, following a careful review, that it should continue.

For lending by international financial institutions (IFIs), the situation is set out in the G8 Communiquéof 12 June as follows:

"We do not wish to punish the peoples of India or Pakistan as a result of actions by their governments, and we will therefore not oppose loans by international financial institutions to the two countries to meet basic human needs. We agree, however. to work for a postponement in consideration of other loans in the World Bank and other international financial institutions to India and Paksitan, and to any other country that will conduct nuclear tests."

In response to Pakistan's severe fiscal crisis Board agreement was given in January to an IMF/World Bank economic reform package. In the case of India, we continue to consider proposals on a case-by-case basis against the basic human needs criteria.